62 d Congress, ) HOUSE OF REPRESENTATIVES. ( Report 
M Session. f I Nq, 286 . 


JUDK’IAL PROC'EEDINGS IN UNITED STATES (’OURTS. 


January 30, 1912.—Referred to the House (.'alendar and ordered to be printed. 


Mr. (Clayton, from the Committee on the Judiciary, submitted the 

following 


REPORT. 

[To accompany H. R. 18236.] 

The Committee on the Judiciary, having had under consideration 
the bill (H. R. 18236) to allow and regulate amendments in judicial 
proceedings in the courts of the United States, report the same back 
with the recommendation that the bill do pass. 

FIRST SECTION OF THE BILL. 

Whether the remedy of an aggrieved person is at law or in equity is 
often a very close question not easily determined by lawyers or 
judges. Sometimes a bill in equity is filed and after a lapse of con¬ 
siderable time and much money spent in litigation, and after a right 
of action at law is barred by the statute of limitations, the bill is &- 
missed upon the ground that the complainant has a complete remedy 
at law. In such a case the complainant is left without an available 
remed\^ and justice is therefore defeated. This ought not to be. 

That it is often a difficult question to decide whether the remedy is 
at law or in equity, sfee Buzard v. Houston (119 U. S., 347) and cases 
there cited. See also RusselFs and Winslow’s Digest, volume 1, page 
587, relating to action for fraud. A distinguished Federal judge has 
said that have known cases where a final decision of the Supreme 
Court holding that the remedy was at law and not in equity, rendered 
many years after the institution of the suit, left the parties practically 
without remedy, although at the beginning they had a good case at 
law.” 

In the case of Buzard v. Houston (119 U». S., 347) the bill was in 
equity, and it appeared that the money sought to be recovered had 
been fraudulently obtained, but that complainant’s remedy was at 
law for damages." In other words, the bill showed a ground for legal 
and not equitable relief. A demurrer to the bill on the ground that 
it showed no equity was overruled by the circuit court, and on appeal 






2 JUDICIAL PROCEEDINGS IN UNITED STATES COURTS. 

to the Supreme Court the decision of the circuit court was reversed. 

The authorities directly in point, cited by the Supr’eme Court in 
support of its decision, were: Parkersburg v. Brown (106 U. S., 487, 
500), Ambler v. Choteau (107 U. S., 586), and Litchfield v. Ballou 
(114 V. S., 190), all cases of supposed mistake or fraud in which it 
developed on appeal that a remedy could be found in an action at 
-law, and the litigations were abortive. 

Insurance Co. v. Bailey (13 Wall., 616) is a case illustrating the 
same unfortunate predicament in which the litigant often finds him¬ 
self. That was a case brought in equity for an accounting for fraud, 
and the Supreme Court concluded, several years after the suit was 
brought, that the complainant had mistaken his remedy, and coidd 
have maintained an action for fraud. 

In Whitehead Shattuck (138 U. S., 151) the bill in equity to 
Tecover land was dismissed on the ground that ejectment would lie. 
In Scott V. Neely (140 U. S., 110) a Mil to subject land to payment of 
contract debt was dismissed on appeal, because the complainant had 
not established his claim at law; and in Cates v. Allen (149 U. S., 459)’ 
a bill to set aside a conveyance of land, brought by a contract creditor, 
was dismissed on the same ground. 

The above case of Buzard v. Houston was also followed in United 
States V. Bitter Root Development Co. (200 U. S., 472) and in the 
following cases: Jones v. Mutual Fidelity Co. (123 Fed. Rep., 519), 
Mutual Life Insurance Co. v. Pearson (il4 Fed. Rep., 398), Such v. 
Bank (127 Fed. Rep., 452), Ames Realty Co. v. Big Indian Mining 
Co. (146 Fed. Rep., 176), and in a large number of other cases in 
the inferior Federal courts. 

Provision is made in section 1 of the bill that in such cases, where 
a mistaken remedy has been pursued, that the court may impose 
terms, costs, etc., so that any gross injustice may not be committed. 

SECOND SECTION OF THE BILL. 

The jurisdiction of the Federal courts should appear upon the 
face of the record, but it often happens where the jurisdiction 
depends upon diverse citizenship that the plaintiff fails to make the 
necessary allegation. Sometimes attention is not called to this 
defect in the trial court, but it is first noticed in the appellate court. 
This results in the reversal and remanding of the cause for new trial. 
The second section of the bill will enable an amendment to be made 
in an appellate court and in that way prevent the reversal of the 
cases on account of tliis defect in pleading. 

In Steigedeler V. McQueston (198 U. S., 141) it is declared a general 
existing rule that the case will be dismissed when defect of allegation 
of diverse citizenship appears, either in the pleading or otherwise. 

WRile, under the judiciary act of 1789, an issue as to the fact of 
citizenship could only be made by plea in abatement when the 
pleading properly averred citizenship, the act of March 3, 1875 
(18 Stat., 470, 472; sec. 1^7), made it the duty of the circuit court, at 
any time in the progress of a cause, to dismiss the suit if it was satis¬ 
fied either that it did not really and substantially involve a dispute 
or controversy properly within the jurisdiction of the court, or that 
the parties were improperly made or joined' as plaintiffs or defendants 
for the purpose of creating a case cognizable or removable under the 



.9-S 



JUDICIAL PROCEEDINGS IN UNITED STATES COURTS, 3 

’* act of Congress. (Sheppard v. Grave, 14 Howard, 505; Williams v. 
Nottawa, 104 U. S., 209, 211; Farmington v. Pillsbury, 114 U. S., 
138, 143; Little v. Giles, 118 U. S., 596, 602; Morris v. Gilmer, 129 
U. S., 315, 316.) 

<8 In Parker v. Overman (18 How., 137), Robertson v. Cease (97 U. S., 
646), Everhart v. Huntsville College (120 U. S., 223), Timmons v. 
Elyton Land Co. (139 U. S., 378), Denny v. Pironi (141 U. S., 121), 
and Wolfe v. Hartford Life Insurance Co. (148 U. S., 389), the above 
principle was applied when the defect discovered related to a question 
of diverse citizenship. 

In Steigdeler v. McQuesteii, above cited, the complaint properly 
alleged citizenship, and there was a motion to dismiss on other 
grounds, but no mention was made on the motion of nondiversity 
citizenship. Nevertheless the defendant might have raised the point 
in the trial court on a plea in abatement, but he waited until evidence 
taken b}^ a master disclosed the jurisdictional defect. Then the 
objection to the jurisdiction was made. The trial court then denied 
the defendant’s request to dismiss on that ground, and a trial was 
had, resulting in a judgment for the plaintiff on the merits. The 
defendant appealed to the Supreme Court. The Supreme Court sus¬ 
tained the circuit court, on the ground that dhe evidence so taken 
did not refute the allegation of diverse citizenship. But the Supreme 
Court reasserted the rule that if the proof had refuted the allegation, 
the decision would be reversed and the suit dismissed. Eaton v. Hoge 
(141 Fed. Rep., 66), adopts the same rule as the Supreme Court in 
cases involving the same question. 

Both sections are in line with modern good legislation and seek to 
have substantial justice done in cases where now mere technicalities 
are allowed to defeat justice. 


o 


0 028 001 748 6 


>» 




